Let’s face it, online software and auto-fill features are making tax filing less and less painful even for the do-it-yourselfers.
Still, whether you’re outsourcing the work to an algorithm or an accountant, it’s always a good idea to know when deadlines fall and what’s new every year.
Here’s our guide to the 2020 tax season:
1. When is the deadline to contribute to my RRSP?
Since March 1 falls on a Sunday this year, the cutoff this year is March 2.
Remember, you can put money into your registered retirement savings plan (RRSP) any time. But if you want to get a tax refund for your RRSP contribution with your 2019 return, you have to add the funds by the March deadline.
2. When’s the tax-filing deadline?
As usual, April 30 is the date most Canadians need to keep in mind. For the majority of tax filers, this is the deadline to both pay any tax due and file returns.
If you’re self-employed, this year you have until June 15 to file. Remember, though, that if you owe taxes, you still need to pay up by April 30.
If you’re late to either settle your balance or send in your paperwork, you’ll face late-filing penalty and daily interest charges on any taxes owed.
3. When’s the earliest I can file?
If you just can’t wait to get that big refund, know that the Canada Revenue Agency (CRA) will start accepting electronic returns on Feb. 24.
Most people want to skip the tax-processing queue because they anticipate getting money back. But having a big tax bill is also a good reason to file early. That allows you to set up a plan to pay your tax in installments. The more you manage to pay by April 30, the fewer extra charges you’ll face.
Still, there are potential drawbacks with filing too early, said Robin Taub of TurboTax. Many of the tax slips you need to file your return are due March 2, so it’s not a good idea to file before then unless you’re sure you’ve received all of them, she noted.
Also, it usually takes until mid-March for tax slips and other information the CRA has on file to become available through its auto-fill my return feature, which allows you to automatically fill-in part of your return.
4. What’s new this year?
Here are the highlights:
New and improved federal tax breaks:
Climate Action Incentive. Albertans will now be able to claim this federal incentive, while residents of New Brunswick will not. If you live in Saskatchewan, Manitoba or Ontario, you continue to be eligible and stand to receive a considerably larger amount this tax season compared to last year.
The money, which may create or boost a tax refund or reduce a balance owing, is meant to offset the cost of the carbon tax in provinces that do not have a carbon price regime of their own. The amount of the tax credit depends on family size — you can use this table from H&R Block to calculate how much your household can claim.
It’s important to note that the tax credit applies to the household, not the individual taxpayer, said Lisa Gittens of H&R Block. This means that only one person for every family living under the same roof should claim the credit, she added.
In Alberta, where the federal carbon tax took effect in January, taxpayers will now be getting the federal incentive instead of the Alberta Leadership Adjustment Rebate, which was only available to lower-income taxpayers.
Larger withdrawals under the Home Buyers’ Plan. The Home Buyers Plan allows you to withdraw money from your RRSP to buy your first home. The withdrawal is tax-free as long you put the money back into your RRSP within 15 years according to a set schedule that starts the second year after the year in which you first withdrew funds. (However, you can also repay in full or more than the required amount.)
What’s changed here is that the maximum amount you can pluck from your retirement account increased from $25,000 to $35,000 for withdrawals made after March 19, 2019. While this has no impact on 2019 returns, if you took advantage of the beefed-up plan, you’ll find your HBP statement account in the notice of assessment for your 2020 return, Gittens said.
That statement will indicate any amount you have repaid, your remaining balance and what you need to put back in the RRSP the following year. It’s important to know you need to designate your RRSP contributions as HBP repayments. If you don’t, it will be considered a regular RRSP contribution and you’ll be deemed to have missed an HBP repayment. That repayment installment will become taxable, as if it had been a regular RRSP withdrawal.
“It really is a simple step to miss,” Gittens said, “especially for those who are using like online software or don’t communicate correctly to their tax professional.”
Cannabis as a medical expense. If you’ve been prescribed medical cannabis products, you may now be able to claim them under the medical expense tax credit.
Canada Workers Benefit. The Working Income Tax Benefit, a refundable tax credit for low-income Canadians who work, is now the Canada Workers Benefit. With the CWB, the maximum tax credit increases by up to $170 and the income level at which the credit is phased out completely is higher.
New and improved provincial tax breaks:
The low-income individuals and families (LIFT) tax credit. The LIFT credit is designed so that someone working full-time making minimum wage pays no provincial tax. It works out to tax relief of up to $850 for individuals and up to $1,700 for couples. Those who qualify will get a tax reduction of $450 on average, the government estimates.
Childcare access and relief from expenses (CARE). This refundable tax credit aims to help families with children up to age 16 and income of up to $150,000. The credit is in addition to the provincial and federal childcare expense deductions and includes a broad range of child-care options, such as day camps and boarding schools.
Eligible families stand to receive up to $6,000 per child under the age of seven and up to $3,750 per child between the ages of seven and 16.
The tuition tax credit is back. Eliminated in 2017, the tuition tax credit is now a thing again. Students and eligible relatives will be able to claim tuition fees paid in 2019 as well as in 2017 and in 2018.
Tax breaks that are no longer:
Education tax credit. The provincial government has nixed the education credit starting with tax year 2019. Happily, you can still claim tuition fees.
Service upgrades from CRA:
Check processing times. The CRA now has an online tool that lets you check the estimated processing time for tax returns and other tax-related requests. This isn’t real-time tracking of your actual return, though. If you input your filing date, you’ll get an estimate of when the agency aims to issue your notice of assessment.
PINs for phone calls. You can now set up a personal identification number to quickly identify yourself when calling the CRA. You can set up the PIN over the phone or in My Account.
Paper returns. If you filed with pen and paper last year, you’ll receive your tax package in the mail by Feb. 17.
Trudeau says he discussed border with Biden, but no deal
Prime Minister Justin Trudeau said on Sunday he has spoken with U.S. President Joe Biden about how to lift pandemic-related border restrictions between the two countries but made clear no breakthrough has been achieved.
U.S. and Canadian business leaders have voiced increasing concern about the ban on non-essential travel in light of COVID-19 that was first imposed in March 2020 and renewed on a monthly basis since then. The border measures do not affect trade flows.
The border restrictions have choked off tourism between the two countries. Canadian businesses, especially airlines and those that depend on tourism, have been lobbying the Liberal government to relax the restrictions.
Canada last week took a cautious first step, saying it was prepared to relax quarantine protocols for fully vaccinated citizens returning home starting in early July.
Trudeau, speaking after a Group of Seven summit in Britain, said he had talked to Biden “about coordinating measures at our borders as both our countries move ahead with mass vaccination.” Canada is resisting calls for the border measures to be relaxed, citing the need for more people to be vaccinated.
The United States is ahead of Canada in terms of vaccination totals.
“We will continue to work closely together on moving forward in the right way but each of us always will put at the forefront the interests and the safety of our own citizens,” Trudeau told a televised news conference when asked the Biden conversation.
“Many countries, like Canada, continue to say that now is not the time to travel,” Trudeau added, though he said it is important to get back to normalcy as quickly as possible.
(Reporting by David Ljunggren in Ottawa; Editing by Will Dunham)
Man with 39 wive dies in India
A 76-year-old man who had 39 wives and 94 children and was said to be the head of the world’s largest family has died in north east India, the chief minister of his home state said.
With a total of 167 members, the family is the world’s largest, according to local media, although this depends on whether you count the grandchildren, of whom Ziona has 33.
Ziona lived with his family in a vast, four-story pink structure with around 100 rooms in Baktawng, a remote village in Mizoram that became a tourist attraction as a result, according to Zoramthanga.
The sect, named “Chana”, was founded by Ziona’s father in 1942 and has a membership of hundreds of families. Ziona married his first wife when he was 17, and claimed he once married ten wives in a single year.
They shared a dormitory near his private bedroom, and locals said he liked to have seven or eight of them by his side at all times.
Despite his family’s huge size, Ziona told Reuters in a 2011 interview he wanted to grow it even further.
“I am ready to expand my family and willing to go to any extent to marry,” he said.
“I have so many people to care for and look after, and I consider myself a lucky man.”
(Reporting by Alasdair Pal and Adnan Abidi in New Delhi; Editing by Raissa Kasolowsky)
Huawei CFO seeks publication ban on HSBC documents in U.S. extradition case
Huawei Chief Financial Officer Meng Wanzhou on Monday will seek to bar publication of documents her legal team received from HSBC, a request opposed by Canadian prosecutors in her U.S. extradition case who say it violates the principles of open court.
Meng’s legal team will present arguments in support of the ban in the British Columbia Supreme Court.
Meng, 49, was arrested at Vancouver International Airport in December 2018 on a warrant from the United States, where she faces charges of bank fraud for allegedly misleading HSBC about Huawei Technologies Co Ltd’s business dealings in Iran and potentially causing the bank to break U.S. sanctions on business in Iran.
She has been under house arrest in Vancouver for more than two years and fighting her extradition to the United States. Meng has said she is innocent.
Lawyers for Huawei and HSBC in Hong Kong agreed to a release of the documents in April to Meng’s legal team on the condition that they “use reasonable effort” to keep confidential information concealed from the public, according to submissions filed by the defense on Friday.
Prosecutors representing the Canadian government argued against the ban, saying in submissions filed the same day that “to be consistent with the open court principle, a ban must be tailored” and details should be selectively redacted from the public, rather than the whole documents.
A consortium of media outlets, including Reuters News, also opposes the ban.
The open court principle requires that court proceedings be open and accessible to the public and to the media.
It is unclear what documents Huawei obtained from HSBC, but defense lawyers argue they are relevant to Meng’s case.
Meng’s hearing was initially set to wrap up in May but Associate Chief Justice Heather Holmes granted an extension to allow the defense to read through the new documents.
Hearings in the extradition case are scheduled to finish in late August.
(Reporting by Moira Warburton in Vancouver; Editing by Howard Goller)
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